Are the bulls asserting that there is no “shadow inventory” at all, or are they saying that it just isn’t on the market right now, and may take a long time to get there. Two very different things, no?
BTW, as far as I know, seconds can indeed foreclose on a borrower, but most of them would be wiped out at this point (most of these homes are down 20% or more on the 80/20 loans, so their position is wiped out), so they are not going through with it. That does not mean that they won’t go through with it if the PTB manages to inflate housing prices again.
That, right there, could put downward pressure on prices if all the seconds tried to collect by foreclosing as prices neared levels that would clear their loans.
